The Startup Hype - Just a bluff?

Abstract: In the last few years increased media coverage on the successes of Swedish startups has lead to a considerable hype and aura around new and innovative companies that aim to disrupt their respective markets. But is this hype also represented and justified by consumer behavior? We aim to examine this phenomenon by comparing consumer choices in two types of products to determine the scope in which a product developed by a startup will be preferred to the same product produced by a traditional company. To quantify the phenomenon of the "startup hype", attributes such as innovation, newness, attitude, and impression are measured, as they are seen to be associated with the word "startup" and a plausible cause for positivity bias. In order to answer the research question, two hypotheses models with a number of sub-hypotheses were designed and tested with the help of Independent T-tests to secure statistical accuracy. The two hypotheses models aim to explore whether the level of a products' innovation has an effect on consumer behavior when it comes to a number of parameters related to consumer behavior; or if the effect depends on whether the company is branded as a startup. In order to answer these hypotheses, various theoretical frameworks were examined in the field of brand equity and related fields. Furthermore, a quantitative experimental pilot study is conducted, in order to collect and analyze primary data. One of the main insights from the study is that the startup hype is not really justified by consumer behavior, as the study shows that customers in general, have a more positive bias towards well-established corporations than startups. This includes a higher perceived brand ability and employer attractiveness for corporations. In comparison, data shows that startups are more associated with innovation than well-established corporations and that highly innovative products are more likable in general, leading to managerial implications for corporations who have to work with innovation to stay competitive. It is believed that valuable insights for further research are notably within the area of brand equity and innovation; as the thesis will give insights to marketing opportunities for startups and development implications for larger corporations. The study is seen as an extension to the work of Nextopia (Dahlén, Thorbjørnsen & Sjödin, 2011) and Techtopia (Sjöstrand & Appelgren, 2016), hence recommendations for further research involves continuing exploring the area of positivity bias towards different attributes, preferably related to newness, innovation or technology.